DivX announced Tuesday, that John Tanner, their Chief Financial Officer, has resigned for âpersonal reasonsâ? and will be leaving the company at the end of May. Tanner has spent the last 2 and a half years working for DivX and to see him leave, less then a year after the company went public, does comes as a bit of a surprise.
Understandably, the market is concerned over the development. Shenandoah Capital calls the event a âlegitimate red flag.â?
Irrespective, upper-echelon management leaving is a legitimate fundamental red flag. In the specific case of a CFO change, a decline in results is a reasonable expectation. It is the âunexpectedâ? change, rather than the planned change that produces the warning.
Itâs hard to argue that the loss of Tanner is a positive catalyst for DivXâs stock, but other then whatever lingering regrets, Tanner might now have about getting that DivX tattoo Iâm not convinced that this news is really bad for anyone.